Bitcoin value plunged in Friday trading sliding below $8,000 after Nigeria’s Central Bank Governor, Mr Godwin Emefiele, cautioned would-be investors in Nigeria to be wary of fraud and market manipulation in global cryptocurrreny markets.
“We cannot as a central bank give support to situations” where people risk savings to “gamble,” Emefiele said in a report by Per Second News last week.
Bitcoin fell to a two-month low of $7,540 at 7:48 a.m. Friday according to this newspaper’s findings in New-York.
Bitcoin’s all-time high was $19,783 on Dec. 17.
Bitcoin isn’t the only decentralized platform seeing huge losses over the last 24 hours.
Ethereum and ripple, the second- and third-largest virtual currencies, dipped 23 and 31 percent, respectively, in the past 24 hours
Because crypto currency values stem from how useful it is to the global economy, the more it’s limited or banned, the more likely it valuations sink.
In January 2017, the central bank released a circular to lenders asking them not to use, hold, or trade virtual currencies pending “substantive regulation and or decision by the CBN.
What is Bitcoin?
A pseudonymous software developer going by the name of Satoshi Nakamoto proposed bitcoin in 2008, as an electronic payment system based on mathematical proof. The idea was to produce a means of exchange, independent of any central authority, that could be transferred electronically in a secure, verifiable and immutable way.
To this day, no-one knows who Satoshi Nakamoto really is.
In what ways is it different from traditional currencies?
Bitcoin can be used to pay for things electronically, if both parties are willing. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
Bitcoin rules state that only 21 million bitcoins can ever be created, though the coins can be split into smaller parts. That could make bitcoin, like gold, an attractive inflation hedge, backers say. There are 16.67 million bitcoin in circulation now.
On the other hand, the potential creation of new digital currencies creates “the possibility of limitless supply of different cryptocurrencies,” undermining the value of existing ones, UBS warned recently.
$100 of bitcoin in 2010 is worth $75 million today